Toyota Motor will build its first electric vehicle produced outside Japan in the Canadian province of Ontario as part of a multimillion-dollar public-private project announced in July.

The automaker will build the vehicle--an electric version of the RAV4 SUV--at its plant in Woodstock, Ontario, the Canadian government said in a release today.

Toyota plans to invest as much as C$545 million ($558 million) in the overall project. Known as Operation Green Light, the plan includes upgrades at other Toyota plants in Ontario, the country's industrial heartland.

The Canadian government will chip in C$70.84 million toward C$506 million worth of Operation Green Light, with Ontario providing another C$70.84 million toward the project's C$545 million total.

The RAV4 venture is a joint project with Tesla Motors. The compact crossover electric vehicles will be built on the same line as the gasoline-powered RAV4 at the Woodstock plant, about 135 kilometers southwest of Toronto.

Toyota plans to build an electric version of its RAV4 at a plant in Canada.
Toyota

"It's a very significant vehicle for Toyota," said Jesse Toprak, an analyst at automotive Web site Truecar.com.

"This is the first full EV vehicle that is going to be sold in volume and the success of this vehicle is more or less going to set the pace of EV sales for not only Toyota, but also the industry."

A big appeal of the EV RAV4 is that it is going to be the first fully electric SUV, which is a segment that is product-hungry, Toprak said.

The electric power trains will be built at Tesla's production facility in Palo Alto, Calif., and then shipped to Woodstock for final assembly in the vehicle.

Canadian governments have a history of supporting automakers operating in the country. Vehicle manufacturers and auto parts makers employ thousands of workers in Canada, mostly in Ontario, its industrial heartland.

"We worked hard to become North America's No. 1 producer of cars," Ontario Premier Dalton McGuinty said. "To stay on top, we need to produce the next generation of cars that use clean technology."

Canada's federal and provincial governments joined with the U.S. government in providing billions of dollars in loans to keep the industry afloat as the global economic crisis led to a steep falloff in car sales worldwide.

Toyota said details on U.S. pricing and distribution of the electric RAV4 would be announced later. A decision about sales in Canada has not yet been made.